FXStreet (Edinburgh) – Researchers at Deutsche Bank have evaluated the near term scenario for the recent deal between Iran and Western powers.
Key Quotes
“The implications of the Iran nuclear deal are clearly enormous and transformative for the region politically and economically long-term”.
“It is important to note that, before any sanctions relief is provided the deal requires the International Atomic Energy Agency (IAEA) to certify Iran has complied with numerous steps that would lengthen its “breakout” period to enrich uranium from the current estimate of two months to one year”.
“In other words, sanctions are unlikely to be lifted for at least six months and perhaps as long as a year. But, as part of the deal, Iran has insisted they will not begin to fulfill these conditions until the US Congress approves the deal”.
“It is our view it is extremely unlikely that Congress will block this deal but highly likely that both the House and the Senate will register very strong disapproval of the deal amid promises to undo the agreement if a Republican is elected President in 2016”.
“Despite the associated risk to global oil supply from the nuclear deal in Iran alongside the recent uptick in US rig counts, net length in crude oil still remains at elevated levels, suggesting that positioning risk continues to exist in the oil market and that the market has likely bottomed out”.
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